In the second week of May, consumer inflation came in lower than expected, retail sales declined and service sector data remains depressed.
In Brazil, inflation fell to a near 10-year low in April as easing food costs and one-off electricity discounts helped push the pace of price increases below the government target for the first time since 2010.
Inflation increased by 0.14% in April after rising 0.25% in March – last April, price levels increased by 0.61%. The decrease was also due to a sharp drop in electricity prices (-6.39%) and fuel costs (-1.95%).
These two items correspond a decrease of 0.32 percentage points for inflation from March to April. Electricity bills were cheaper due to discounts applied by the National Agency of Energy Electricity (Aneel) to compensate consumers for undue charges last year.
With this result, inflation in the 12-month measure was at 4.08% compared to 4.57% in the previous month – the lowest level since July 2007. Underlying inflation measures also remain stable: in three-month seasonally adjusted core measures, there was a slight increase from 2.7% to 2.9%, while service inflation fell from 6.0% to 5.9%.
In addition, underlying service inflation declined to 5.1% in 12 months and the three-month and four-month moving averages, controlling for seasonality, were stable at 3.7%.
Retail sales declined in March but ended the first quarter higher.
Restricted retail sales decreased 1.9% in March compared to February, seasonally adjusted, and 4.0% in comparison with March 2016. The fall of sales in March is due to a sharp decline in the supermarket category, which fell 6.2% during the month.
Expanded retail sales, which includes sales of automobiles and construction materials, fell by 2.0% and 3.7%, respectively, compared to February and March 2016.
Despite the declines in March, restricted and expanded sales increased by 3.3% and 3.1%, respectively, in the first quarter of 2017, after decreases of 1.1% and 0.4% in the fourth quarter of 2016.
Continuing with activity in Brazil, service sector data showed a decrease in the first quarter.
The service sector decreased 2.3% in March compared to February, falling by 5.0% in comparison with March. In February, service sector data advanced 0.4% compared to January and declined 5.3% year-on-year.
In March, five components of the research contracted, with services to families suffering a fall of 2.1%. Despite the decline in March, service sector data ended the first quarter stable after falling 2.7% in the fourth quarter of last year.
That was last week, but let’s not dwell on the past, make sure you click here to see what is happening in the third week of May.